Staunton could secure a lucrative deal at the end of the season when he can quit Villa on a free transfer under the Bosman ruling.
However, Gregory is desperate to hold on to Staunton and has two months to show the 29-year-old Republic of Ireland international that Villa are heading in the right direction.
Gregory said: "I've only been back two weeks but it has only taken two games to remind me what a great player Steve is. You could see the difference he made when he came on as a substitute after injury against Atletico Madrid in the Uefa Cup last week. He is a world-class distributor of the ball.
"To be honest, I would be devastated if Steve Staunton decided to leave Aston Villa. He's a player I rate really highly. I've had a brief chat with him since I came back but I will do whatever I can to keep him.
"It's not just about money. Steve wants to be at a club that wins things which was something he was used to during his days at Liverpool. We've got to convince Steve in the next few weeks that we are heading in the right direction - and we've got to be thinking of bringing in top international players.
"I don't know what his decision will be but it will take a very big club to prise him away from us."
Villa are believed to have offered Staunton a contract which would make him the highest paid player at the club but he has been frustrated by a domestic season of under-achievement, with early exits from the Coca- Cola and FA Cups and a battle against relegation.
The Ipswich Town striker David Johnson boosted his growing reputation as one of the most promising young strikers outside the Premiership with a man-of-the-match performance for the Football League's Under-21 side in a goalless draw against their Italian Serie A counterparts.
Johnson timed the moment at which to shine to perfection, with the impressive crowd of 6,558 at Charlton Athletic's Valley ground including the England coaching assistant, John Gorman, and the technical consultant, Jimmy Armfield.
The Jamaican-born former Manchester United youth player had the two best chances to break the deadlock in an otherwise uninspiring goalless draw, but was denied on both occasions by good reaction saves from the Italian goalkeeper Christian Abbiati, of Monza.
The representative side's manager, Alan Curbishley, said: "At least one or two of the players have out of the game with flying colours. David Johnson caught the eye. He is a delight to work with, he's very bubbly and he's on top of his game at the moment."
Johnson, 21, has scored 24 goals so far this season, with most coming during Ipswich's recent First Division promotion push after his move from Bury last November.Reuse content